They said it
“Before, it was [all about] location. Now it is quality of air systems, quality of everything in the building, [it’s] layouts…”
Bruce Flatt, CEO of Toronto-based mega-manager Brookfield Asset Management, describes the extra considerations facing office investors in the current market, on Bloomberg TV
One more sleep…
Tomorrow, readers will learn which managers, investors and advisers have been crowned victorious in PERE’s 17th Global Awards. 2022 was a difficult year for capital raisers and dealmakers alike, but the varied roster of winners and runners-up proves successes were not just possible, but widespread. As will be revealed tomorrow, while one firm swept up no fewer than 12 award wins – no prize for guessing which – overall, the 72 different awards were won by representatives from 32 different organizations, showcasing the breadth and depth of industry talent.
Many of the awards were also fiercely contested: in the global categories, no one winner managed to secure more than half of the vote share. Global Logistics Investor of the Year was a particular nail-biter from start to finish, with only two votes deciding it in the end. Do not forget to also look out for the exclusive interview with PERE’s Lifetime Achievement Award winner – an inspiring recipient whose story is well worth reading.
Nominate Women in Private Markets 2023
Speaking of accolades, it is the time of year when PERE and its affiliates at PEI Group ask you to tell us which 60 individuals should be included in our annual list celebrating the achievements of women working across alternative sectors. Nominations opened late last week, and the deadline is the end of Wednesday, 22 March.
Among the 10 women named in the real estate category for last year’s Women of Influence list were Gemma Burgess, chief executive officer of Ferguson Partners; Kathleen McCarthy, global co-head of Blackstone Real Estate; Tracy Stroh, managing director and region head for Europe at GIC; and Kim Hourihan, global chief investment officer of CBRE Real Estate Investments. We cannot wait to see who you decide deserves admission to the hall of fame this year. Click here to submit a nomination.
GIC continues privatization spree
Singaporean sovereign wealth fund GIC continues to spend big on North American real estate, having taken New York-based real estate investment trust INDUS Realty Trust private in a deal valued at $868 million. The deal – in a joint venture with Centerbridge Partners – is GIC’s fourth take-private in the last year, the most prominent being the $15 billion acquisition of STORE Capital with Oak Street last February.
GIC is not alone in taking advantage of opportunities in the public real estate securities arena in recent months. Other prominent market participants have been active in the take-private space in the last year, with Blackstone purchasing American Campus Communities and PS Business Parks for a combined $20.4 billion, and industrial giant Prologis completing the largest real estate deal ever, taking Duke Realty private in a deal worth $23 billion.
Gaw sees reviving growth in China…
Hong Kong headquartered Gaw Capital Partners believes China will “perform better than most people predict” this year, the firm’s managing principal Kenneth Gaw said in an interview on Bloomberg TV. He said the Chinese government has shown a significant change in attitude, easing its stance on the ‘three red lines’ policy, which included a cap on debt on properties. Gaw also sees China reviving a growth stance with initiatives including the launch of a new pilot scheme for private equity real estate funds. In addition, he felt the opening up of the country’s border would encourage a consumption-led recovery from which retail sector will see immediate benefit.
The one area of concern remaining is that North American investors look set to stay on the sidelines due to geopolitical issues, though Asian investors are still keen in investing in the country. Last month, PERE revealed our North American investors asked Gaw Capital to ringfence them from China investments made via the firm’s latest pan-Asia opportunity fund. “When confidence is back, [when] people feel like they can make money again, I think people will jump in again,” Gaw said.
…And is bullish on data centers across Asia
Gaw Capital Partners continues to be bullish elsewhere in Asia too, having formed a JV platform with Singapore-headquartered specialist A3 Capital to develop a portfolio of data centers assets across key markets in Southeast Asia. The platform, named Infinaxis Data Centers, has already made its first investment in Malaysia, with a pipeline in neighboring Indonesia and Singapore already established, according to an announcement.
Gaw is not the only firm interested in both data centers and China. Singapore-based manager CapitaLand Investment has established a China-focused data center development fund, CapitaLand China Data Center Partners, to develop two assets in Beijing. The firm seeded the vehicle with S$530 million ($393.2 million; €370.1 million) and, upon completion, will bring the firm’s total portfolio in the asset class to 26 properties across Asia and Europe.
Asia’s mixed ESG progress
The countries comprising the Asia-Pacific region vary on many fronts, and ESG adoption is no exception. At the 2023 PERE Asia Summit last week, KKR Asia real estate head John Pattar pointed to only three APAC countries that had made significant progress in their ESG efforts – Japan, Australia and Singapore – all of which have strong gross national product per capita and many rules and regulations heavily weighted toward ESG.
By contrast, “Southeast Asia is not going that way,” he said. India, Indonesia, and Vietnam – where many businesses have relocated outside of China – “are not following a lot of the rules and regulations because they feel it’s too expensive.” Meanwhile, Pattar called the cities of Seoul and Hong Kong “two outliers in Asia that should do better.” Both have high GNP per capita but very low green building penetration among their Class A properties – no more than about 30 percent compared with Singapore’s 90 percent, he said.
Desai targets ‘underserved’ Asia
Rushabh Desai [his LinkedIn here], the man chiefly responsible for growing Allianz Real Estate‘s Asia assets under management from $800 million in 2016 to almost $9 billion at the point of his departure from the German insurer last year, is switching from investor to manager. Desai has formed Varsity Group Asia Pacific, a business targeting alternative sectors in real estate, alongside the co-founders of student accommodation business Scape Australia, Stephen Gaitanos and Craig Carracher. Desai will be chief executive officer and lead the firm from Singapore.
Varsity aims to raise investment vehicles for outlays in the living, education, healthcare and technology sectors. Desai said in a statement that these sectors are “significantly underserved in the region”. He added the firm’s initial focus would be on the living sector “leveraging the operational expertise and investment experience of Stephen, Craig and myself in the space.”
Six months after Deborah Orida [her LinkedIn here] left the global head of real assets role at CPP Investments, the Toronto-based investor has announced her replacement. Maximilian Biagosch [his LinkedIn here] has taken up the position while continuing his role as head of Europe for CPP. Biagosch’s background is in private equity, having joined as global head of portfolio value creation in 2015 and most recently having been head of direct private equity. Before CPP, he was head of the financing group at private equity firm Permira. Peter Ballon, CPP’s global head of real estate, will report to Biagosch as part of the move, as he did to Orida before she took the chief executive role at Canadian peer PSP Investments.
This week’s investor meetings
Tuesday, February 28
- Chicago Teachers’ Pension Fund
- Los Angeles City Employees’ Retirement System
- Emergency Services & State Super
- Municipal Fire & Police Retirement System of Iowa
- New Mexico Educational Retirement Board
- New Mexico State Investment Council
- Dallas Fort Worth International Airport
- Ohio Police & Fire Pension Fund
- Plymouth County Retirement Association
- Public Employees’ Retirement System of Mississippi
- SBI Holdings
- Stanislaus County Employees Retirement Association
- Vermont Pension Investment Committee
Wednesday, March 1
- Hartford Municipal Employees Retirement Fund
- California State Teachers’ Retirement System
- Fresno County Employees’ Retirement Association
- Marin County Employees’ Retirement Association (MCERA)
- City of Aurora General Employees Retirement Plan
- Employees Retirement System of Texas
- Kentucky Public Pensions Authority
- Los Angeles County Employees’ Retirement Association
Thursday, March 2
- Arkansas Local Police and Fire Retirement System
- City of Aurora General Employees Retirement Plan
- Los Angeles Fire & Police Pension System
- Minnesota State Board of Investment
- Police & Fire Retirement System of the City of Detroit
- South Carolina Retirement System
- Teachers’ Retirement System of Louisiana
- Teachers’ Retirement System of the City of New York
Friday, March 3
Today’s letter was prepared by Peter Benson with Jonathan Brasse, Evelyn Lee, Charlotte D’Souza and Christie Ou contributing